Consulting for agile transformation and agile working

Definition and meaning of "agile transformations"

The term "agile transformation" describes the path from a traditional organization to an agile organization, i.e., an organization that follows a whole range of agile principles in product development and service delivery in order to survive in the VUCA world. Agile transformation is a change process that companies do not undergo overnight. After all, for an organization to truly work in an agile manner, it takes much more than just methodological expertise and shorter planning cycles. Much more decisive are the framework conditions under which value creation takes place in the company. They determine what behavior is appropriate when, what demands the organization places on its employees, and what boundaries must not be crossed.

Why do agile transformations fail?
It is often precisely these framework conditions that become critical success factors and cause many agile transformations to fail. Structural elements such as reporting and approval processes, control and planning mechanisms, or internal performance incentives and evaluations can either hinder agile value creation or make it truly possible. They are the biggest lever for specifically breaking down and reconnecting the fusion of value creation and the values and principles of an organization. To understand how this can be achieved, a fundamental insight is needed at the outset:

At the heart of an agile transformation are not methods or frameworks, but first and foremost values and principles that govern collaboration.

After all, each of the well-known, widely promoted agile methods was developed through the consistent application of these values and principles to a specific business case—be it SCRUM for project work, Kanban for the service sector, or Lean Startup for testing new business ideas. Visualization and estimation techniques such as burn-down charts and planning poker followed.

Unfortunately, agile transformations too often focus on these methods and techniques instead of starting with values and principles. However, no matter how popular a method may be, it can only be successfully applied by an organization if it follows the same agile values and principles on which the method is based. If it does not, the application will not only remain ineffective, but in the worst case, it will cause damage.An organization's guiding values and principles, in turn, are embedded in its culture, which invisibly determines behavior and guides decisions. When we talk about sustainable agile transformation, we automatically mean cultural transformation as well. Agility does not begin with Post-its, squads, sprints, and hackathons, but with values and principles and a critical look at one's own culture.

Step by step toward an agile organization Culture is the memory of the organization.

It is their immune system, which attempts to ensure the organization's survival in the future by replicating what has been successful in the past. Culture is reflected in the organization: in processes, organizational charts, and rules that have proven helpful over decades. To bring about lasting change in an organization's culture, it is not enough to simply proclaim new values and plaster the hallways with posters – just as it is of little help to try to inspire genuine enthusiasm in an audience at a concert with a bad atmosphere using a teleprompter. Even if every single employee is convinced of the effectiveness of agile values and principles, the organization's processes and structures often act as a layer of clay. Only by specifically questioning processes, decision-making rules, organizational charts, etc. can the existing framework conditions for collaboration be analyzed in small iterations, specifically changed, and the agility of the organization increased. Each iteration thus enables new experiences to be gained, which enter the cultural memory and lead to lasting change.

1. Recognizing patterns
An iteration begins with the question of the value creation mission and where the current organization is hindering it. In the first step, we observe the collaboration in order to recognize critical patterns and thus identify starting points. This can be illustrated using the example of a swing: in order to accelerate or decelerate a child who is already swinging with the desired effect, it is first necessary to observe the pattern in which the swing is swinging. Only then can the push be applied at the right place and at the right time to increase or reduce the momentum as desired. In the same way, we first observe and analyze the existing organization and its patterns. Example: A client's human resources department has two value-added tasks. On the one hand, it is responsible for administrative tasks such as contracts, references, the onboarding process, etc. On the other hand, it is responsible for designing individual personnel development measures. In the past, internal clients have repeatedly been dissatisfied with the latter. The department's employees are accustomed to leaving decisions of a certain magnitude to their formal manager. Our observations show that, due to their formal decision-making authority, managers have become a strong second point of reference in the daily work of employees, alongside the actual customer.

2. Formulate a hypothesis
In the next step, we relate the identified pattern to the value creation mission and formulate a hypothesis about the influence of the organization on value creation. We look for a reason why the work is not succeeding as intended. In our example, we recognize that employees are developing personnel development concepts that primarily correspond to the manager's ideas. As a result, the customer focus takes a back seat and the value creation of the concepts suffers. We hypothesize that without formal power structures, this part of value creation would be more customer-centric and thus produce better results.

 

3.Breaking patterns
Based on the hypothesis, we work together to find a suitable lever to break the recurring pattern. This involves an organizational intervention, a kind of experiment, in which new things are tried out and different experiences are gathered for a predefined period of time. This is the only way to change mindsets and beliefs – with a direct impact on the underlying culture. Targeted disruption of the existing organization is needed to enable sustainable change. In our example, we disrupt the existing organization of the department by almost completely eliminating the influence of management for the period of the next personnel development concept – from the clarification of the assignment to its completion. We limit reporting, transfer full budget responsibility to the team, and let them make all decisions on their own, without the manager being able to intervene. Their only task is to create the necessary safe space. We accompany both the team and the manager throughout the pilot to prevent a relapse into old behavior patterns.

4. Evaluate results
Once the experiment is complete, check what changes have occurred. Did the lever have the desired effect? What should we keep from what we tried, and what needs to be reconsidered or adjusted? Could this also be a lever for other areas? Or do we need to try something completely different? In our example, it worked. Despite initial uncertainties, the team reports effective and efficient collaboration, in which they organized themselves independently and focused exclusively on the wishes and needs of the customers. The result is a product that inspires customers and delivers real added value. Important: There are no blueprints or best practices for agile transformations. The successful experiment only shows that the identified lever worked in this specific environment with this specific team. Transferability to other teams and areas always requires a separate hypothesis and a new experiment—even if previous experience accelerates the observation process and often significantly increases the accuracy of hypothesis formation.

Using the transformation loop to become an agile organization

As our customer's example shows, change presents organizations with complex challenges, and a well-thought-out approach is needed to meet these challenges. Transforming an organization into an agile organization therefore means uncertainty and must be done holistically in order to achieve the full effect. Our iterative approach, based on experimentation, enables incremental improvement. Nevertheless, we need a structured approach to maintain an overview and recognize successes. The following structured and iterative approach enables precisely this and is able to respond to evolving transformation conditions: the Agile Transformation Loop. The Agile Transformation Loop describes an approach based on Scrum, enriched with aspects from our many years of change management experience. This approach consists of phases that build on each other and is based on a continuous learning and development process that provides a structured framework for the iteration "recognize patterns – form hypotheses – break patterns – evaluate results."

Preparation of the agile transformation process

Structural groundwork is required to initiate agile transformation. The first step is to "identify patterns and form hypotheses" in order to analyze the existing organization and its patterns. These patterns are then related to the value creation mission, allowing us to derive hypotheses that in turn lay the foundation for the so-called transformation backlog. The transformation backlog can be thought of as a guiding list of points to be addressed on the path to agile transformation. In addition, a team is needed to drive the agile transformation within the company. We rely on a transformation team consisting of different roles. The main sponsor acts as the transformation owner, the voice of the customer "organization," and is overall responsible for the transformation. This person is supported in particular by the Transformation Master, who provides procedural support to the team and, indirectly, to the transformation project. Together, they assist the Transformation Core Team in implementing the various steps on the path to an agile organization. Furthermore, the transformation process is based on sprints, the duration of which must be clarified in advance. Experience has shown that an iteration of 4 weeks makes sense.

Our consulting approach: Greater agility through networking and institutionalization

Our consulting projects typically focus on a specific area of a company. The best conditions for making this area more agile are in place when the request for change and the motivation for it come from the manager responsible for that area. Through coaching and operational support, we empower the managers in that area to effectively build an agile organization from the inside out and to implement lasting cultural changes. In addition, we contribute comprehensive expertise in identifying value creation levers and empower managers to independently drive cultural change forward step by step.

How can a department-specific, agile transformation be turned into a comprehensive transformation that results in the entire company becoming agile at its core?

The more seeds of agile organization are sown within the company and interconnected, the more experiences can be shared, lessons learned exchanged, and common patterns—both desirable and undesirable—identified. With our many years of experience in sustainable change management, we have the necessary expertise to promote the appropriate dynamics and develop a self-reinforcing effect.

Many individual agile transformations and open communication about them gradually reveal the "hidden rules" and "organizational patterns" and institutionalize an agile organization. This does not turn the company's culture upside down. Experience shows that many "hidden rules" and "organizational patterns" remain stable, while central rules and organizational structures that stand in the way of change and value creation are specifically replaced. After all, agile transformation must never become an end in itself.

First and foremost, we must always ask ourselves what our value creation mission is and what structures and conditions are currently hindering it. Genuine value creation is therefore our top priority in every project. Because in the end, what counts is not how many Post-its are stuck to the wall or how many sprints you've run, but whether the customer is willing to pay for the product or service. We are convinced that well-organized value creation that satisfies genuine customer needs not only brings sustainable economic success, but also gives employees a sense of satisfaction, makes them proud, and inspires them. That's what we stand for.

This is precisely why we do not have a blueprint for "the agile organization." What we can offer you, however, is a proven approach to successfully tackling agile transformation. Our experiences have been extremely positive. Whether as a coach, consultant, trainer, co-thinker, or co-pilot, we will work with you to find out what is needed and have a whole range of tools at our disposal to achieve this.